Financial Projections and Analysis
We offer a variety of financial forecasting and analysis services for everybody from startups to Fortune 500 corporations:
- Financial Forecasts/Projections: Your financial forecast is your business plan in numbers. We can create easy-to-use financial forecasts with a level of sophistication that is appropriate for your specific situation.
Our most full-featured financial forecasting model, which we have been improving since 1999 (Cayenne founder Akira Hirai originally developed it for his Silicon Valley startups before he founded Cayenne Consulting in 2001), is a powerful tool for helping you understand what your financial future might look like. Some VCs called it "the best financial forecast I've ever seen."
Our financial modeling process will distill the essence of your business into a manageable number of core assumptions and cause-and-effect relationships so that you can distinguish between what's important and what isn't.
Our most detailed financial models include:
- Major assumptions are documented and organized by categories (such as customer growth, revenue sources, pricing, costs, payment terms, capital expenditures, and headcount). Most of the assumptions are placed on a single color-coded sheet so that you don't have to hunt through formulas to figure out where a number came from. We will work with you to identify and quantify the assumptions and values that are most meaningful for your type of business.
- All standard financial statements, including the income statement (Profit & Loss), balance sheet, and statement of cash flow.
- We create three independently derived cash flow schedules (the standard GAAP Statement of Cash Flows, Cash Receipts & Disbursements, and Cash Sources & Uses. This makes it easier to see the data from new perspectives. Also, since each statement is independently created, we are able to implement robust error checking to verify the model's integrity.
- All cash flow calculations are done at the monthly level of detail. This is important for ensuring that your business raises enough capital to withstand cash flow spikes due to factors like inventory replenishment, slow accounts receivable cycles, large quarterly tax payments, major capital purchases, and other events.
- Printed reports are quarterly for the first two years, plus annual for all five years. This is the level of detail most investors and lenders are comfortable with.
- Operating expenses can be grouped by departments as appropriate for your industry. Typical departments might be General & Admin, Sales & Marketing, Research & Development, or Operations. This allows you to compare department expenses as a percentage of total expenses to other companies in your industry. This is one way to determine whether you might be over- or under-allocating resources to specific functions.
- Key ratios such as revenue per headcount allows you to benchmark your projections against other companies in your industry.
- Create multiple funding scenarios, so you can compare the effects of different funding strategies. For example, you might want to see what happens if you raise a little money now and some more a year later, vs. raising all of the money right away.
- Create a sensitivity analysis that shows you the impact of changing your major assumptions by equal amounts, in percentage terms. This allows you to determine which assumptions have the greatest impact on your forecast, and must therefore be thought out most carefully. This also allows you and your audience (investors and lenders, say) to focus on important things, rather than getting bogged down on immaterial issues.
- A one-page summary including a basic 5-year P&L table and color charts.
- Print a complete forecast, including cover page and table of contents, with a single mouse click.
Here's an example of one of our more detailed financial forecasts:
We can customize our financial forecast model to fit any type of business, or create a new financial model from scratch depending on the circumstances. The process is as much art as science and we have the experience to help you get it right.
- Capital Formation Strategy: We can evaluate growth opportunities for your business plan and help you develop an appropriate capital formation strategy. In doing so, we analyze your capital needs, evaluate your capital structure, and identify appropriate sources of capital (Angels, venture capital, grants, SBA-guaranteed loans, bank financing, internal cash flow, etc.) to help you achieve your full potential.
- Valuations: We can help you estimate the value of a business for the purposes of an investment, sale, merger, or acquisition. Please see our valuation services page for more details.
- Risk Analysis & Management: What can go wrong, and what can you do about it? Every business faces a unique set of risks. Identifying, analyzing, and mitigating those risks can provide peace of mind and a strong competitive advantage. We can help you identify and quantify these risks through a risk audit and the development of sophisticated risk models. Some of the techniques we can employ include the development of Monte Carlo simulation models so that you can visualize the full range of potential outcomes.
- Spreadsheet Auditing: You've built a complex spreadsheet. Are you positive that it's free of errors? Would you bet on it? Almost every spreadsheet we have examined has at least one significant flaw (and numerous small flaws). We are experts at finding and fixing problems, so let us help!
- Other Financial Analyses: We can help with a wide variety of other financial and statistical analyses, ranging from product profitability analyses, to evaluating new opportunities, to Monte Carlo simulations and scenario analyses. If it can be done in a spreadsheet, we can do it.
I'd like to learn more about preparing a financial forecast!
If you'd like a free consultation, please start by completing the following form: